Telecom Argentina And Cablevisión Enter Into Preliminary Merger Agreement

(RTTNews) - Telecom Argentina S.A. (TEO), mobile and fixed telecommunications company in Argentina, as well as in Paraguay for mobile telecommunications, and Cablevisión S.A., paid TV provider and leader in the broadband market in Argentina and the second largest paid TV provider in Uruguay, announced a plan to merge their respective corporate structures and operations with the aim of creating a leading provider of convergent telecommunications services and to participate in the opening of the telecommunications sector that, according to Argentine regulations, is expected to occur beginning in January 2018.

The Boards of Directors of the Companies approved a Preliminary Merger Agreement. The proposed transaction follows a worldwide convergent trend towards combining the provision of fixed and mobile telecommunications services, distribution of video and internet, known as "quadruple play".

The merger agreement reached between the Companies provides that once the required regulatory authorizations have been obtained and the corresponding corporate process has been complied with, Cablevisión will be merged into Telecom Argentina, which will be the surviving entity.

As a result of the merger, Telecom Argentina will increase its equity and its capital stock and will issue as consideration 1.18 billion ordinary book-entry shares of its common stock, with nominal value of ARS $1 and entitled to one vote per share, to be delivered to Cablevisión's shareholders according to the established Distribution Ratio.

The Distribution Ratio approved by the Board of Directors of the Companies is 9,871.07005 shares of Telecom Argentina per share of Cablevisión, which implies that Cablevisión Holding S.A., the controlling shareholder of Cablevisión, and Fintech Media LLC, its minority shareholder will receive a direct and indirect total participation in Telecom Argentina equivalent to 55% of the combined company's total outstanding capital after considering the aforementioned capital stock increase. The current shareholders of Telecom Argentina will retain the remaining 45% of the capital stock of the combined Company as a result of the merger.

The transaction is subject to the approval of the shareholders of each of the Companies at their respective shareholders' meetings and by the relevant regulatory authorities.